Abstract
In this work, considering consumers’ service sensitivity for the third-party collector in the reverse supply chain, a game model (including a manufacturer and a third-party collector) with dual-channel recycling structure was established. Based on the bounded rationality, we used dynamics theory to analyze the dynamic service and pricing decisions of the manufacturer and the third-party collector in the process of collecting waste products. The results showed that adjustment speeds of pricing and service decisions have great effect on the stability of recycling market, and the recycling market is most sensitive to the change of third-party collectors’ service decision. When the recycling market is in chaos, it has a strong initial value sensitivity. In addition, we found that increase of consumers’ service sensitivity and service cost parameter had negative effect on stability of the recycling market; there is a reverse relationship between price adjustment parameters and the service adjustment parameter. With the increase of service adjustment parameter, the bifurcation point of the system will appear more quickly. Finally, chaotic market can be controlled by the feedback control method.
Highlights
With the rapid development of technology, the speed of upgrading products becomes faster
The closed-loop supply chain (CLSC) appears; in contrast to traditional supply chains, CLSC contains the process of collecting waste products from consumers and remanufacturing [1], which is regarded as the reverse supply chain [2]
The main purpose of this paper is to analyze the dynamic change of pricing and service decisions under bounded rationality in the reverse supply chain and discuss how consumers’ service sensitivity affect the decision
Summary
With the rapid development of technology, the speed of upgrading products becomes faster. Many independent third-party collectors have appeared in the recycling market and make great contributions to the collection of waste products. The behavior of participants in the recycling market tends to be complex and the result may not converge to the Nash equilibrium, and complex phenomena like bifurcation and chaos may occur [15] In this case, traditional static optimization methods are not suitable and dynamic game model should be established to analyze the supply chain. We found that the recycling mode, service, and bounded rationality have great effect on the optimal operational decision in the supply chain. The main purpose of this paper is to analyze the dynamic change of pricing and service decisions under bounded rationality in the reverse supply chain and discuss how consumers’ service sensitivity affect the decision. A method of chaos control is given in Section 6, and in Section 7 we draw the relevant conclusions
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